This week ushers in a fresh start for two of the Southeast’s oldest and largest regional banks, days after they sealed the industry’s biggest buyout since the recession.
Longtime rivals BB&T and SunTrust announced plans to get hitched in February in an all-stock deal valued at about $30 billion. They officially tied the knot around midnight Friday, a few weeks after nailing down the final approvals they needed to take the plunge and reemerge under the Truist Financial Corp. banner.
The transition to the new brand is already underway. SunTrust Banks Inc. ended its long run as a public company when the markets closed last week. Shares of BB&T Corp., which is the buyer, will trade under the symbol "TFC" when the opening bell rings Monday.
“Following months of thoughtful collaborative planning, we are prepared to begin a successful integration," said Kelly King, the longtime BB&T chief executive officer who will retain that title at Truist for the next 22 months.
As for the 10 million households the newly conjoined bank has projected it will serve, it’s business as usual for the moment. King estimated it will take up to two years to complete the switch to the Truist brand.
"Clients will continue to be served through their respective BB&T or SunTrust branches, websites, mobile apps, financial advisers and relationship managers as systems are integrated," he said in a recent statement. "
The so-called merger of equals reflects the unrelenting market forces that have been reshaping and consolidating the banking business for years. The wave of buyouts over the past decade has mostly claimed smaller, growth-constrained lenders.
The Truist tie-up is the exception. BB&T and SunTrust were both healthy regional financial institutions, with roughly 3,100 branches and $470 billion in assets between them, spread over 13 states and Washington, D.C.
King, who plans to hand the reins to SunTrust counterpart Bill Rogers in September 2021, sermonized about the rationale of the deal during a trip to Charleston this year.
"Things have changed," he said at BB&T's annual meeting of shareholders in April.
King pointed to several household-name businesses that either have faltered or failed in recent years because they didn't adapt to rapidly shifting market conditions.
The Winston-Salem bank, which traces its roots back to 1872, recognized the need for a shakeup a few years ago. It even concocted an internal catchphrase, “Disrupt or Die,” later softened to “Disrupt 2 Thrive.”
“I wanted it to be dramatic because it is dramatic,” Kelly told investors.
King has maintained that a bank combining the best that BB&T and the 128-year-old SunTrust can offer would create a formidable competitor to what he views as an unhealthy “oligopoly” of much bigger U.S.-based rivals, namely JPMorgan, Citibank, Bank of America and Wells Fargo.
At the same time, Truist would gain the financial clout to invest in the latest technological bells and whistles that digital-savvy customers expect, he said.
While details haven't been disclosed, the projected $1.6 billion in post-merger expense savings, including job cuts and branch closings, will likely be felt in South Carolina. Truist will start out in the Palmetto State with a footprint of about 130 retail offices.
King dismissed talk that customers are getting cold feet and jumping ship ahead of the BB&T-SunTrust nuptials, which creates the sixth-largest U.S. bank.
"I know there's been a lot of the conversation out in the market about everybody saying they have taken all of our business. That's not true. ... There is not any material attrition," he told analysts during BB&T's most recent quarterly earnings call.
The rubber really hits the road Monday, when former longtime rivals are suddenly thrust into the new role of coworkers. One of the first orders of business for Truist's newlywed senior management will be to rally the troops as they embark on the daunting and delicate task of combining two big legacy banks into one.
“We think that's our number one job is, to get out," King said during the October investor call. "We plan, kind of, a roadshow if you will, to get out and talk to our teams across the entire enterprise about our culture."